Wiz’s decision to walk away from a proposed $23 billion acquisition by Google could significantly affect the tech sector, particularly Microsoft.
Wiz, an Israeli cybersecurity startup, opted to reject Google’s offer, with CEO Assaf Rappaport emphasizing the company’s commitment to growing towards $1 billion in annual revenue and an eventual IPO. This acquisition would have strengthened Google’s cybersecurity capabilities, especially in light of a recent major outage involving CrowdStrike, a prominent player in the cybersecurity market.
Analyst Dan Ives from Wedbush pointed out that concerns from investors and ongoing antitrust issues were instrumental in the deal unraveling. Google has faced heightened scrutiny regarding its business practices and recently concluded a trial related to antitrust allegations from the Department of Justice.
Ives noted in a message to investors that the failure of this acquisition will create “ripple impacts” throughout the industry. He anticipates that Google will intensify its efforts in cybersecurity despite the collapse of the Wiz deal, a strategy likely to be mirrored by Microsoft as well.
He highlighted that there’s a growing need for consolidation within the cybersecurity sector, suggesting that Microsoft may increase efforts to enhance its cybersecurity offerings over the next year to year and a half. This comes after Microsoft faced criticism during a widespread IT outage linked to an update issue with CrowdStrike’s cybersecurity software, which impacted numerous users and various sectors globally.
Although Ives still regards CrowdStrike as a leader in cybersecurity, the recent incident may indicate a pressing need for Microsoft to strengthen its position in this area, especially following the failed partnership with Wiz.